Germany, after leading the world for so many years as an advanced industrial economy is now offering the rest of Europe an accelerated insight into what life is going to be like with an ageing population, a falling birth-rate, and a society in which too few active young people are prepared to carry the burden of social responsibility forced on them by demographics.

What was once East Germany has lost almost 1.5 million of its people since the reunification of 1990. That drop means than 16 % of all homes in the Eastern Lander are either abandoned or unoccupied. House prices in these areas have fallen 30 % in five years. In a country with as high a proportion of owner occupiers as Britain, say, the drop would have been far steeper, with nothing short of catastrophic consequences. Compared to Britain, where home ownership levels are reaching three out of four households, just 10 % of housing is privately owned in Berlin, half the levels of Hamburg and Munich. In some areas the population drop has been even more vertiginous. The new cities built by the DDR in the 1950s to serve its chemical industries have lost as much as one in three of their population in the last decade. It is a drop fast enough to threaten disaster. Some settlements can no longer sustain pressure in their water mains, their sewerage systems no longer have the critical mass to function properly, and the survivors are too scattered for public transport to be sustainable.

But Germany is still Germany. It is not a country prepared to sit back and see all this just happen. It is doing what it can to shape its future, rather than fatalistically respond to events. The positive aspect to this is a massive investment in transport infrastructure. More downbeat is a necessary willingness to embark on a costly programme of housing demolition, with a view to concentrating the remaining population in a more sustainable pattern. Britain’s deputy prime minister John Prescott proposed a much more modest version of the same thing, and has had to face down bitter political fall-out. Heaven only knows how southern California will deal with it when gasoline runs out and dooms the freeway suburbs to the same kind of extinction that faced the abandoned city of Fatehpur Sikri.

This is a far cry from the euphoria of 1990. What was meant to be a huge expansion in West German prosperity eastward, has turned into an exercise in managed retrenchment albeit a fascinating one. But Germany is still a society that is ready to contemplate large plans. It is also a society that in urban terms is like no other in Europe in that it lacks a single clearly dominant city. The idea that Germany has no authentic world city, and its attempts to deal with the supposed absence of one, have formed the back drop to much of the thinking about urbanism in Germany. Either in an attempt to rectify the perceived shortcomings of the lack of such a city for the most populous state in Europe, by creating one, or finding an alternative.

There have been a series of more or less ill fated attempts to turn Berlin, the most likely candidate for the role of a German Paris, or London, into a genuine metropolis. Speer and Hitler set out to build Germania, doubling Berlin’s population, and equipping it with the stone monuments that would reinforce its claims to attention by sheer force of malignant will. Whether such an entity could ever have been understood as a genuine city, which is above all else a settlement dedicated to making the random interactions of life possible, is open to doubt. Reunification for a moment brought about another glimpse of a new version of Berlin as a world city. It was another chance for a fresh start. And as if to demonstrate that property development has always been fuelled by the culture of irrational exuberance, as much as by cold calculation, the boldness of reunification resulted in the construction of a city that failed to reflect the realities of Germany’s actual urban structure – a network of cities, rather than a one dominant city of the French or British model. But while the world’s attention was focussed on the extraordinary transformation of Berlin’s old centre, from a fortified wasteland on the periphery of two cities that never spoke to each other, into a single entity, the real transformation in Germany was the rise and rise of Munich, and the eclipse of Frankfurt’s dreams of becoming a world financial centre the equal of London. It is a shift that can be measured in the passenger numbers passing through the expanding Munich airport, and the emerging network of ICE trains that has made Frankfurt the root of a Y shaped pattern. In fact, despite the impression that Berlin is the focus of Germany’s most serious property bust, with 1.75 million sq m of empty office space, ( 9.7 % of the total), it is close to the European average, while Frankfurt with a vacancy rate of 17.2 % is much more challenged.

Just as persistent a theme of thinking about German cities as the quest for the metropolis has been the hope that Germany does not need one and the belief that it should learn to make the most of what it has. The evidence would suggest that it has indeed done so. As the world’s leading exporter, economic growth is concentrated in Germany’s urban areas. The country’s ten biggest cities account for 20 % of the economy' s GDP, while accommodating only 13 % of Germany's population. Moreover, the number of new jobs, that has been created in these cities is higher, with a growth-rate of 3.1 % per year , compared with a national average growth-rate of new Jobs of 1,1 %. Half of all the new jobs generated in Germany last year were in its ten biggest cities.

Germany has invested heavily in its transport infrastructure, which stopped – combined with a new tax on fuel and energy – the long-standing growth in car-mileage. Railways have seen an average annual growth rates of 3-4 per, helped by 215 new High speed trains linking the major cities. On the other hand there is no question but that the old East is economically troubled, and despite the massive investment in infrastructure, things are still very different in the two halves of the country. With 18.8 % of the work force in the east out of a job in 2005, things are almost twice as bad as they are in the west.

The question is what is this doing to the eastern areas of Germany. Berlin, if it is not going to be London or Paris, does seem to have identified a role for itself as a creative centre, on a grander scale, continuing the role of the pre reunification Kreuzberg as a Bohemian enclave. “Poor but sexy”, in the words of its mayor. Dresden also seems to have found a new role, by reconstructing its Baroque past. For Halle Josef Haydn may not be enough of a future.

Despite the attractions of cheap accommodation which has allowed creative communities to flourish in Berlin and other depressed but grandly proportioned cities, and set in place the basis of an economic future, the other cities of eastern Germany do not yet have the cultural base to follow in Berlin’s footsteps. With only 1.9 % of the population in the East born outside Germany compared to 10.6 % in the West, the statistics suggest that the east is still a long way from producing a genuinely cosmopolitan urban culture. It would also suggest that despite the prejudices of right wing extremists, a strong migrant community is clear evidence of a city’s economic health.

Deyan Sudjic is dean of the faculty of art, design and architecture at Kingston University in London and architecture critic for the Observer

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